M&HCV Sales to Witness Good Growth, Says VECV CEO

Declining truck sales in the second quarter of this financial year had stakeholders in the trucking industry worrying. However, industry experts are optimistic about better sales due to several encouraging factors, the most significant one being the approaching festive season. This thought is also being echoed by Mr.Vinod Aggarwal, CEO of Volvo Eicher Commercial Vehicles (VECV), who is of the opinion that the demand for commercial vehicles is only going to increase in the near future.

Mr. Aggarwal believes that the demand trend is going to be positive, especially due to the festive season. However, he says that September is going to be ‘sluggish’ as compared to the same month last year (which had witnessed a huge volume of pre-buying due to ABS and other regulatory implementations). Nonetheless, the month of October in 2015 was a lull period which did not help increase sales of commercial vehicles. This year, the conditions have been dull in July, August and September (as the replacement demand has already been fulfilled). However, the month of October 2016, which is also the beginning of festive season, will help boost truck sales.

Also, good monsoons and impact of the Seventh Pay Commission will lead to good demand in FMCG and two-wheelers, which will again lead to a rise in demand for trucks, says Mr. Aggarwal. Certain sectors are also growing, such as the construction industry, which has experienced a 40 percent YTD growth in construction trucks. However, the haulage segment may face a bit of downturn as it is already at its peak currently.

On being asked to reflect on the demand for heavy-duty trucks owing to better roads and highways, Mr. Aggarwal said that besides this, the hub and spoke model is also becoming more clear and both heavy trucks (for carrying goods from factories to hubs) and medium-light vehicles (for carrying goods from hubs to spokes and for last-mile delivery) will be required for transportation.

He was positive about an increase in the requirement of all kinds of trucks. Talking about the huge range of trucks rolled out by VECV, Mr. Aggarwal said, “We are there right from 4.9 tonne to 49 tonnes and we have various variants which cater to the needs of each type of customers like if someone needs with the body size of 10 feet, then we have a truck, someone needs with 12 feet, 14 feet, 16 feet, 18, 19, 20, so there is a body size available for each feet requirement right going up to 32 feet. So there are various options available to the customer to choose the right truck for his requirement.”

He also said that the company’s plant in Pithampur is already manufacturing Euro VI engines which are being used in the medium-duty trucks in Europe. But, road conditions in India are different, so these engines have to be customized accordingly. However, VECV already has the competence of manufacturing these advanced engines and the commercial vehicle maker is ready to face the deadlines.